Diary of Gideon Welles

April 20, Wednesday. The last public evening reception of the season took place last evening at the Executive Mansion. It was a jam, not creditable in its arrangements to the authorities. The multitude were not misbehaved, farther than crowding together in disorder and confusion may be so regarded. Had there been a small guard, or even a few police officers, present, there might have been regulations which would have been readily acquiesced in and observed. There has always been a want of order and proper management at these levees or receptions, which I hope may soon be corrected.

April 19, Tuesday. The President did not make his appearance to-day in Cabinet. He was in Baltimore last evening at the opening of the fair, and is reported to have made a speech. He has a fondness for attending these shows only surpassed by Seward. Neither Seward, nor Blair, nor Chase was present with us to-day. Blair was with the President at Baltimore. Being a Marylander, there was propriety in his attendance.

April 18, Monday. The steamer Chenango exploded her boilers in New York Harbor, and I feared there might have been mischief, such as [an] incendiary shell in the coal, but the reports indicate that such was not the case.

I am gratified to find so many sagacious and able naval officers sustaining me and my course in relation to Du Pont. There is no man in the service who is so skillful and successful at intrigue as S. F. Du Pont. He has his cliques and has laid his plans adroitly, and may, for a time, be successful in deceiving the public by artful means, but it cannot last. Truth is mighty and will prevail.

Stocks have had a heavy fall to-day in New York, and there are reported failures. It is a temporary check, I apprehend, a reaction or pause resulting from some action of Mr. Chase in New York. He has doubtless effected a loan with the banks, and they have closed on some of their customers. Money, or investments, are tending to government securities, rather than railroad and other like investments, for the moment.

April 16, Saturday. Had a long telegram at midnight from Cairo, respecting Rebel movements in western Kentucky, — at Paducah, Columbus, Fort Pillow, etc. Strange that an army of 6000 Rebels should be moving unmolested within our lines. But for the gunboats, they would repossess themselves of the defenses, yet General Halleck wants the magnanimity and justice to acknowledge or even mention the service.

There is still much excitement and uneasy feeling on the gold and currency question. Not a day but that I am spoken to on the subject. It is unpleasant, because my views are wholly dissimilar from the policy of the Treasury Department, and Chase is sensitive and tender — touchy, I may say — if others do not agree with him and adopt his expedients. Mr. Chase is now in New York. He has directed the payment of the May interest, anticipating that throwing out so much gold will affect the market favorably. It will be likely to have that effect for a few days but is no cure for the evil. The volume of irredeemable paper must be reduced before there can be permanent relief. He attributes to speculators the rise in gold! As well charge the manufacturers with affecting the depth of water in the rivers, because they erect dams across the tributaries! Yet one cannot reason with our great financier on the subject. He will consider it a reflection on himself personally and claims he cannot get along successfully if opposed.

I remarked to Senator Trumbull, whom I met when taking my evening walk last Thursday, and was inquired of, that I could hardly answer or discuss his inquiry in regard to the gold excitement, because in a conversation which we had a year or two since, when one of the bills was pending,—the first, I believe, — I had said to him I was a hard-money man and could indorse no standards but gold and silver as the measure of value and regretted and distrusted the scheme of legal paper tenders. Chase heard of that conversation and claims I was embarrassing the Treasury.

This sensitiveness indicates what I fear and have said, viz. Chase has no system on which he relies, but is seeking expedients which tumble down more rapidly than he can construct them. He cannot stop what he and others call “the rise of gold,” but which is really the depreciation of paper, by the contrivances he is throwing out. The gold dollar, the customs certificates, the interest-bearing Treasury notes, etc., etc., are all failures and harmful and will prove so. The Secretary of the Treasury found a great and rich country filled with enthusiasm in a noble cause and full of wealth, with which they responded to his call, but their recourses and sacrifices were no evidence of financial talent on the part of the Secretary who used them.

The Secretary is not always bold, and has not enforced taxation; he is not wise beyond others, and has not maintained the true measure of value; he resorts to expedients instead of abiding by fixed principles. By multiplying irredeemable paper and general inflation, his “ten forty” five-per-cents may be taken, but at what cost to the country! He is in New York and may negotiate a loan; but if he does, it will be with the banks and, I presume, at six per cent. If so, the banks will not be able to help the speculators, and they, being cramped, will suffer, and perhaps fail. The fancy stocks will be likely to fall under this operation, and the surplus money may seek government securities, but under the inflation how expensive to the country!

April 15, Friday. Chase and Blair were neither of them at the Cabinet-meeting to-day, nor was Stanton. Seward takes upon himself the French tobacco question. He wishes me to procure some one to investigate and report on the facts of the case of the Sir William Peel. I told him I thought Charles Eames as good a counsellor on prize matters as any lawyer whom I knew, and if referred to me I should give the case to Eames.

The gold panic has subsided, or rather abated. Chase is in New York. It is curious to see the speculator’s conjectures and remarks on the expedients and subterfuges that are resorted to. Gold is truth. Its paper substitute is a fiction, sustained by public confidence in part because there is a belief that it will ultimately bring gold, but it has no intrinsic value and the great increase in quantity is undermining confidence.

The House passed a resolution of censure on Long for his weak and reprehensible speech. It is a pity the subject was taken up at all. No good has come of it, but I hope no harm. Lurking treason may feel a little strengthened by the failure to expel.

April 14, Thursday. The Baltimore American of this morning contains my report in relation to the ironclads and Du Pont. A synopsis, very brief, has been sent out by the agent of the newspapers, but the press only to a limited extent publishes even that meagre abstract. I believe the New York Tribune does not publish it or take any notice of it. Du Pont and his satellites have been busy, and Greeley and others take such a partisan, personal view of all questions that no honest or fair treatment can be expected of them in a case like this. Without ever looking at facts, Greeley has always vigorously indorsed Du Pont and had his flings at the Navy Department.

Gold is reported at 190 to-day; that is, it requires one hundred and ninety dollars of Treasury notes, Chase’s standard, to buy one hundred dollars in gold, paper has so depreciated.

April 13, Wednesday. Matters press on the Department. Have been very busy. Some talk with Rice about Annapolis and the Naval School, League Island and the navy yard. Suggested that New England must not monopolize and that we should avoid even the appearance of sectionalism.

Consulted Mr. Eames yesterday and again to-day in relation to the investigations into the frauds of naval contractors and others. Told him he must go to Boston to supervise Olcott, who is fierce in diving into matters and often, I apprehend, without judgment.

April 12, Tuesday. To-day have a letter from Admiral Lee respecting the exportation of French tobacco from Richmond. This is an arrangement of Mr. Seward to which I have always objected, but to which the President was persuaded to yield his assent some months ago. The subject has lingered until now. Admiral Lee says the French naval vessels and transports are at the Roads and about to proceed up the James River, and inquires if he shall keep an account of their export.

I took the dispatch to the Cabinet-meeting to ascertain from Mr. Seward what his arrangements were, but he was not present. When the little business on hand was disposed of, I introduced the subject to the President, who told me he had seen the dispatch to me and also one to Mr. Stanton from General Butler. He saw them both at the telegraph office, and after he got home he had sent for Fred Seward and Mr. Stanton. They appear neither of them to think the subject of much consequence, but after Stanton had returned to the War Department and read Butler’s dispatch, he sent the President word that Mr. Seward ought to give the subject attention. The President had therefore told Fred Seward to telegraph his father, who is in New York, to return.

It is curious that the President, who saw Admiral Lee’s dispatch to me, should have consulted the Secretary of War and Assistant Secretary of State without advising me, or consulting me on the subject. He was annoyed, I saw, when I introduced the topic. The reason for all this I well understood. He knew full well my opposition to this whole proceeding, which I had fought off two or three times, until he finally gave in to Seward. When, therefore, some of the difficulties which I had suggested began to arise, the President preferred not to see me. It will not surprise me if this is but the beginning of the trouble we shall experience.

At the Cabinet-meeting, Chase, after presenting his weekly exhibit, showing our national debt to be over sixteen hundred millions, said he should have to request the Navy Department and also that of the Interior to make no farther calls on the Treasury for coin. I told him he must provide for foreign bills which stood different from any others, and if he had paid the Interior or any other Department than the State and Navy, which had foreign bills, and possibly the War Department some foreign purchases, I thought it not right; that I had experienced great difficulty in making California payments, but had met them, because I supposed all domestic bills were treated alike.

Chase did not meet the point squarely, but talked on other subjects, and answered some questions of the President’s about the daily custom receipts, and explained the operations of his gold dollar certificates, etc. I brought him back to the Navy matter by asking him how our paymasters and agents were to draw abroad, — by what standard of value. He said the legal-tender standard. “What is that standard,” I inquired, “in Nassau, in Rio, in China, or London?”

He made me no other answer than that he was anxious to reduce the price of gold, and that something must be done to effect it. Talked of taxing bank circulation and driving it out of existence. I told him that might be a step in the right direction, perhaps, provided he did not increase his paper issues, but that if he issued irredeemable Treasury paper instead to an unlimited amount, there would be no relief; that by reducing the amount of paper and making it payable in specie on demand he would bring his legal tenders and gold nearer to equality. The President remarked that something must be done towards taxing the bank paper; said he did not fully comprehend the financial questions in all their bearings; made some sensible inquiries of Mr. Chase concerning his issues, which were bought for custom-house purposes.

Mr. Usher made some inquiries and suggestions about bringing down the price of gold and compelling banks and others to disgorge that were worthy an old Whig of thirty years gone by. His ideas were crude, absurd, and ridiculous. He evidently has never given the subject attention.

Mr. Grimes and Mr. Hale had a round in the Senate yesterday. The former had the best of the debate, but still did not do himself, the Department, and the service full justice.

April 11, Monday. John C. Rives, it is stated, died yesterday. He was a marked character, guileless, shrewd, simple-hearted, and sagacious, without pretension and without fear, generous and sincere, with a warm heart but no exterior graces. I first met him in the winter of 1829 in the office of Duff Green, where he was bookkeeper. In the winter of 1831, I think, we met at Georgetown at the house of Colonel Corcoran. F. P. Blair, whom I met on the same evening for the first time, had been out with Rives to try their rifles. They had first met a few days previous. Rives was then a clerk in the Fourth Auditor’s office, — Amos Kendall. The latter passed the evening with us. Years later Rives and myself became well acquainted. He was first bookkeeper and then partner of Blair and made the fortunes of both.

In the House of Representatives a sharp and unpleasant discussion has been carried on, on a resolution introduced by the Speaker, Colfax, to expel Long, a Representative from Ohio, for some discreditable partisan remarks, made in a speech last Friday. There being an evening session, I went to the Capitol for the first time this session. Heard Orth, Kenyon, Winter Davis, and one or two others. The latter was declamatory, eloquent, but the debate did not please me, nor the subject. Long I despise for his declarations, but Colfax is not judicious in his movement. Long went beyond the line of his party, and Colfax cannot make them responsible for Long’s folly.